Purplle Secures ₹1,000 Crore in Funding, Signaling a Revival for Indian Startups

In a significant boost for the Indian startup ecosystem, beauty retailer Purplle has closed a ₹1,000 crore ($120 million) financing round. This round was led by Abu Dhabi's sovereign fund, ADIA, alongside other prominent investors. The substantial investment underscores the growing interest in India's fast-expanding consumer sector and marks a revival of large-scale funding for startups in the country.

The financing deal comprises both primary and secondary share sales, with about 70-80% of the funds exchanged between investors in the secondary market. New shareholders, including Indian family offices, have joined the ranks, while initial angel investors and earlier backers like Goldman Sachs and Verlinvest have partially exited. This influx of capital has propelled Purplle's valuation to $1.3 billion, and there may be an additional tranche of investment pending finalization.

Manish Taneja, CEO of Purplle, stated that the bulk of the primary capital will be invested in enhancing technology and experimenting with offline store formats to fuel retail expansion. "We broke even at an adjusted EBITDA level about nine months ago. Our business has grown twice the rate of beauty e-commerce, and the top leadership has remained the same over the years—these things have played a role in the round coming together," he told ET.

Purplle's successful funding round highlights a resurgence in large-scale investments for high-growth companies, following a prolonged period of funding stagnation. The beauty sector, in particular, has seen several companies secure significant investments recently, including Foxtale, Traya, and Rene Cosmetics. Nykaa, an industry incumbent, continues to attract investor interest post-its 2021 IPO, while Myntra and Reliance's Tira are also intensifying their focus on the beauty market.

Purplle remains committed to leveraging technology as its operational backbone, with plans to expand its reach across tier II and III cities. The company currently operates around ten stores and is exploring various retail formats to find the optimal product-market fit. "Technology is like our operating system. We have around ten odd stores, but we are still finding the product-market fit and nothing has been proven yet," Taneja said.

Most of Purplle's sales are driven by its online platform, with six in-house labels including Faces Canada, Carmesi, and Alps Goodness, which are also distributed through offline channels. Sources indicate that nearly half of Purplle's business comes from its own brands, although Taneja declined to comment on the total contribution. The company is considering a public listing within the next three years, or even sooner.

Industry experts predict the emergence of more beauty brands in India, each valued between ₹400 crore and ₹500 crore. Mamaearth's parent company, Honasa Consumer, recently launched a budget beauty brand, Staze 9to9, while its skincare brand The Derma Co achieved an annual revenue run rate of ₹500 crore in April.

In a move to reward its employees, Purplle has announced its largest-ever Employee Stock Ownership Plan (ESOP) buyback program, offering ₹50 crore in liquidity to its employees. This initiative reflects Purplle's commitment to sharing its success with its workforce.

Purplle's latest funding round marks a pivotal moment for the beauty retailer and the broader Indian startup ecosystem. With strategic investments in technology and retail expansion, Purplle is well-positioned to capitalize on the growing consumer demand and continue its impressive growth trajectory. As the beauty sector in India evolves, Purplle's innovative approach and strong market presence will likely make it a key player in the industry.